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- New-home sales off to a roaring start in 2024
New-home sales off to a roaring start in 2024
Plus: NAR runs out of liability insurance coverage
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Disclaimer: Average mortgage rates as of Feb 20, 2024. Ā© MND's Daily Rate Index.
1. Applications take a hit as rates cross 7%
Mortgage interest rates surged last week to the highest level since early December, and that hit mortgage demand hard. Total application volume plunged 10.6% compared with the previous week, according to the MBA.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased to 7.06% from 6.87%, with points increasing to 0.66 from 0.65 (including the origination fee) for loans with a 20% down payment.
āMortgage rates moved back above 7 percent last week following news that inflation picked up in January, dimming hopes of a near-term rate cut,ā said Mike Fratantoni, MBAās chief economist in a release.
2. New-home sales off to a roaring start in 2024
The MBA reported a significant surge in mortgage applications for new home purchases in January, indicating a bright spot in the housing market.
According to the MBA's Builder Application Survey (BAS) for January 2024, there was a 19.1% increase in mortgage applications for new homes compared to the same month last year, and a remarkable 38% jump from December 2023, showcasing the growing appeal of newly constructed homes among buyers.
āApplications for new home purchases were strong in January, as newly built homes remained an attractive option for prospective homebuyers who looked to take advantage of lower mortgage rates during the month,ā
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3. Catch up quick
šļø Startup emerges from stealth with $25 million for robots that lay bricks as fast as humansāand fill the huge shortage of laborers. (Fortune)
š¢ Where are office-to-apartment conversions happeningāand why? (RentCafe)
š Billionaire buying up properties in Calif. town ācannot understandā why locals are āterrifiedā. (NY Post)
š Real estate surprise: Latinos, Asian Americans see biggest homeownership gains. (Axios)
āļø Home Matters USA ā described as a āmortgage relief scamā by federal and state regulators, banned from business and fined $19 million. (Newswire)
In other news:
š§ More than 11,000 people per day will reach 65 in 2024. The Wall Street Journal explores the implications of a U.S. population that is quickly getting older. (WSJ)
ā°ļø Fake funeral livestream scams are all over Facebook. (404 Media)
4. Charted: New apartment supply by market
A significant amount of multifamily supply, financed during a period of ultralow interest rates during the pandemic, is set to come online this year. Below is where the biggest multifamily unit pipelines can be found. You can view more data here.
Source: John Burns Research and Consulting (JBREC)
5. NAR runs out of liability insurance coverage
NAR has exhausted its liability insurance funds, leaving member associations and MLSs without coverage for legal defense, especially against antitrust claims.
This financial strain was reported by industry analyst Rob Hahn and confirmed by HousingWire through anonymous sources. NAR's insurance, provided through Chubb, had a $10 million aggregate limit that's now been reached.
The policy, crucial for defending against lawsuits, particularly impacts smaller associations without their own insurance. With no renewal of the policy in sight and the inability to purchase excess coverage, these entities face significant challenges, including potential bankruptcy, as they grapple with legal costs.
Youāre all caught up. See you on Friday!
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